Bidding Wars
There are a number of items coming together to fuel the bidding wars. The first and most obvious one is the lack of supply. The under supply is now compounding. We are seeing customers of ours that were mortgage approved 2 years ago still looking for a property. That means that today in June 2025 you could have someone approved in 2025, bidding against people approved in 2024 and even 2023. You have a massive pool of people who have been approved but cant draw down on a mortgage as they keep getting outbid. So in a strong economy, with wages still rising, they will go back to their bank or broker and get a higher mortgage amount..... creating more upward pressure in the bidding market. We will now advise all of our customers that are approved for say €500k that there is almost no point looking at a property listed at €495k. It is likely to sell for closer to€600k than €500k and in an increasing amount of cases it is going for over €600k. We also have interest rates falling which is driving the amount of money people can borrow yet higher. They are set to continue falling over the next few months. The bidding wars in the second hand market are having a major impact on the new build market as buyers seek the sanctuary of a Fixed Price. Buyers who have gotten so fed up of losing multiple bidding wars are now drawn to the appeal of a set price that cant move. But Developers and Estate Agents know this. New Build houses that "Normal" market forces would have sold for say €395k could easily now go for €495k as the desperation of the "outbid" combined with the profligate state subsidies drives prices to irrational levels. If I were a developer now Id be building "compact" units in non prime areas and charging €499k for them. Id save the 3 bed semi Ds in good locations for the downturn. This would be very rational behaviour.2. Solutions
- the free market (not a new Czar) Remove the Government from the market. Reduce regulations, taxes, rules etc to allow the private market build private homes. Let that be the focus. The help to buy, first home scheme, housing assistance payment, rent caps, 55% tax rates on rental income, 33% Capital Gains tax are all a disaster. Everyone is losing as this stage - think about it - the biggest fund IRES had lost nearly half its value and wants out of the market, landlords who should be benefiting from these sky high rents are leaving and there is a shortage of supply for renters. You need money in life ! And you especially need people with money to build houses. If we need 400k houses over the next 5 years thats going to cost about €160 billion. The Government doesn't have that money and the locals don't have that. The only way out is to bring back investors by changing Bank rules, taxation rules and removing the rent cap. Investors have to see a way to make money or they don't invest !! There seems to be a public belief that they will invest just because people need houses. Madness.So what about you ?
Mortgage rates in Ireland now start from 3%. Its time to take advantage of that. If you own a property you will have benefited from prices rising. You will have a large amount of equity in your home. This Equity - when used properly can have a major positive impact on your long term finances. You should never need a personal loan again! Your pension should also be maxed out .... if you know how to use this equity correctly.Frequently Asked Questions
How late is too late to switch mortgage lenders?
You can switch mortgage lenders up until the closing date, but the process becomes riskier and more complex the closer you are to closing. Delays, increased costs, and potential impacts on your home purchase timeline make it crucial to evaluate all pros and cons before making a late change.
Can you switch mortgage lenders after fixed rate period?
Yes, you can switch lenders after a fixed rate period, but breaking the rate with your original lender may incur fees. Additionally, you will need to secure a new rate and secure with the new lender, which could have cost implications depending on market conditions.
What are the costs associated with switching mortgage lenders late in the process?
Costs include new valuation fees, potential expedited underwriting or processing fees, and possible penalties for breaking a fixed rate.
How can I negotiate with a seller if I switch lenders late?
Communicating transparently is key. Inform the seller promptly, explain your reasons, and outline your plan for minimising delays.
Does switching lenders late always result in delays?
While delays are common, how significant they are depends on factors like the new lender’s processing speed, requirements, and how quickly you provide necessary documents. Working with a mortgage broker can help streamline the process and reduce delays.
